Bellamy's heading back to market darling status?

Bellamy’s Australia Limited might be on track to regain its market darling status.

Picture: Cordell Richardson.

The Launceston-headquartered baby food and formula maker’s share price has rocketed upwards this month, from $7.55 on October 3 to $9.78 on October 11.

That is still some way from the high of $14.30 in August last year before the company ran into Chinese market difficulties, a shareholder coup which led to a board purge and emerging class actions on behalf of shareholders.

The share price dropped as low as $3.76 in January.

While Bellamy’s sees positive momentum in its core business, there are still challenges to navigate as it implements its turnaround plan.

Bellamy's Australia

Bellamy’s on Wednesday lifted its 2017-18 guidance for revenue and earnings after what it described as positive results early in the financial year.

It upgraded revenue growth guidance from 5-10 per cent to 15-20 per cent for its core business (excluding its recently acquired Camperdown cannery in Victoria).

It increased its guidance for earnings before interest, tax, depreciation and amortisation (EBITDA) from 15-20 per cent to 17-20 per cent.

It said the Camperdown business was forecast to make an EBITDA loss of $1-2 million.

“While Bellamy’s sees positive momentum in its core business, there are still challenges to navigate as it implements its turnaround plan,” it told the ASX.

It said the challenges included China Food and Drug Administration registration, needed to allow exports from Camperdown into China.

Bellamy’s said it expected revenue for the current half of the financial year to be higher than for the second half for reasons including seasonality and a delay in CDFA registration.

Bellamy’s recently paid a $66,000 penalty imposed by the Australian Securities and Investments Commission for allegedly contravening continuous disclosure obligations last year.

It said it paid without admitting liability, and said it believed it complied with its obligations during the period in question.